The 23-year-old founder of Virgil Capital, Stefan Qin, has been accused by the SEC of “fabricated records” for failing to redeem $3.5 million in investments and attempting to withdraw $1.7 million in investor funds to pay off Chinese loan sharks, the SEC stated.
According to Coindesk, the defendants were alleged of misleading investors to believe their money was being used solely for cryptocurrency trading via a proprietary algorithm, while Qin and the entities used the proceeds for personal purposes or for other undisclosed high-risk investments since at least 2018.
However, the investors have not been able to get redemptions from Virgil Sigma Fund as early as July and they were told their interests had been transferred to another fund, the VQR Multistrategy Fund LP, which was basically controlled by Qin as well. According to the SEC complaint, no such transfers have occurred and the redemptions remain outstanding.
The commission also claims that Qin is actively attempting to misappropriate assets from the VQR Fund and to raise new investments in the Sigma Fund.